Kenya ICT 2012 Summit India Case Study

EXCELLENCE IN BUSINESS MANAGEMENT AND STRATEGY

Global Business Outlook

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Global Trends shifting dominance

Global outsourcing growing at over 25% CAGR with huge unaddressed market

Traditional sourcing destinations down from 52% from 7%

to 27%

Newer Locations up

to 23%

India and Philippines and preferred destination steady to stagnant growth

Organizations willing to diversify risks while pursuing labor arbitrage
2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Facets of India Success of ICT industry

The Indian Information Technology industry accounts for a 7.6% of the country's GDP and export earnings as of 2011 More than 2.8 million people are employed in the sector either directly or indirectly, making it one of the biggest job creators in India and a mainstay of the national economy In 2011-12, annual revenues from IT-BPO sector is estimated to have grown over US $100 billion India's outsourcing industry is expected to increase to US $225 billion by 2020. The most prominent IT hub is IT capital Bangalore Each year India produces roughly 500,000 engineers in the country

2.8 mn

IT-BPO employees

58%

Indias share of the global sourcing market

5,000+

Number of companies offering IT services, BPO, ER&D and Software Products

750+

Number of MNC centers in India

~70

Number of countries serviced by India

35+

Number of languages served

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Convergence of Eco System

Software Economic Zone IT-ITES , Jewels , Apparels, Handicraft Over 200

Innovation and R&D

Regulatory bodies

40 Incubators

Bangalore Silicon Valley and other states

Chennai Detroit of India

GIC 657
2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Top 20 Auto makers Ford and Hyundai, the German luxury car maker BMW, Daimler, Mitsubishi , Renault-Nissan, Peugeot..

Right Track To achieve global competitiveness

Delivery Company Dominators Supplier and sub contractors SME and Niche Players

Education & Training Capital Standard and Framework Industry Promotion Government and Legal

In ICT - it is far more effective to develop and promote a nation as opposed to promoting individual enterprises.

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Critical Success Factors to establish ICT

Infrastructure

Process maturity/ Build competencies

Educational System

Social & Living Environment

Government Support

Key Competitiveness Enablers

Cost of Delivery

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Evolving Service Delivery Model

Key Characteristics
Onsite Staffing people at the client site for face to face client interaction Used for specialized tasks requiring high customer involvement Offsite/ Offshore Transferring work to a different location to reduce cost of sourcing Suited for well defined tasks with low customer interaction Presence of delivery centres in vicinity of the client for gaining dual benefits of cost and customer proximity Suited for specialized tasks with moderate customer interaction Multi tier operating model with hub acting as SPoC and central interface with clients

Near shore

Hub and Spoke

Focus is to leverage location advantages and de-risk operations

Suited for complex and specialized tasks which require moderate to high customer interaction 1980s 1990s 2000s 2010 and beyond...

Source: KPMG in India Analysis Hub and Spoke operating model 2012
2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Take away from the manufacturing experience

Focus on core competency

Leverage benefits offered by emerging locations

Appreciate the cultural nuances of operating in a region

Maintain cost leadership at all times

One common philosophy of Leadership, Quality , Teamwork , People , Process and Technology improvement across the organization . Focusing on the needs of the customer, empowering employees, and optimizing existing activities in the process.
9

Ensure brand value is not compromised

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

What , Where , Who

Business Excellence : Systematic use of quality management principles and tools in business management, with the goal of improving performance . Aligned to principles of customer focus, stakeholder value, and process management. Where is it applicable : Applied across functional areas in an enterprise include continuous and breakthrough improvement, preventative management and management by facts.
What tools : MBNQA, EFQM , ISO , Balanced Scorecard, Lean, Six Sigma , process management, and project management Which Industry : IT - BPO ,Telephony and communication , Banking & Insurance , Financial Sector , Pharma, Hospitality , Healthcare , Manufacturing, Logistics etc .
2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

10

Global Framework s and Business models adopted

Customers
IT Development

3rd party Service providers/ Suppliers

Voice of Customer, COPC , eSCM CMMi SVC, ISO 20000, COPC

CMMI DEV , ISO 20000 , PCMM, TMMI , Six Sigma,

ISO 9001

Management Function

COBIT CMMI DEV, TMMI

11

Service Management
IT Infrastructure Services Production Support Application Management IT Enabled services/BPO

Product Management
Test Factory Product Development Application Development

BPO and IT IS CMMI SVC, COPC, eSCM , ISO 27000, COBIT,PCMM, HIPAA, Six Sigma

Cert RMM, ITIL, PMP , Agile , Lean Sigma Admin IT Support HR Finance
Vendor Management

Communication :

TL 9000, eTOM CMMI SVC, ISO

PCMM , Competency Assessment

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Why BE framework ?
GLOBAL High Level of Performance Self Assessment for continuous improvement Strategy Agility and correlate to performance . Recognition and visioning Designing and Managing Performance Management system . Common Language of Excellence across Stake holder, customer and employee Project Management and Supplier Management
2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Customer Satisfaction

Product Reliability

Organization Growth

Improved Efficiency and Effectiveness

Performance Improvement

12

Correlation between adoption of frameworks and ICT maturity

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

13

Global trends Productivity Improvements

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

14

Suggestive Implementation Road Map for Kenya ICT- maturity of delivery engine

Draft sub-vision:

By 2014 / 2015 : X firms to be L3 on CMMi DEV and CMMi - SVC : Y firms to be L5 on CMMi DEV and CMMi SVC : Z firms to be on PCMM L3 : XX firms to be on TIL : XY Six Sigma GB & BB : XYZ firms to be on .
Draft sub-vision: By 2017 : X1 firms to be L3 on CMMi DEV and CMMi - SVC : Y1 firms to be L5 on CMMi DEV and CMMi SVC : Z1 firms to be on PCMM L3 : XX1 firms to be on TIL : XY1 Six Sigma GB & BB : XYZ1 firms to be on .

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Tested, successful collaborative methodology to achieve the vision of maturing the delivery model
Public GoK KICT+ Private Delivery Eng Advisors Assessors Donors

Create CoE GoK KICT+ KPMG +

Clustering
Awareness Benchmarking Readiness check

Pilot Implementation Certification Capacity Capability Competency

Finance modeling Measures of success

Awareness Benchmarking Readiness

Training Baseline Structured Support

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Thank You
Ramesh Krishnamurthy Associate Director Management Consulting Business Excellence Mob: +91 98452 52210 Tel: +91 (80) 3980 6000 rameshk@kpmg.com

Mahesh Punia Partner, Head Management Consulting KPMG East Africa Tele : +254 20 2806126
mpunia@kpmg.co.ke

2012 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

17